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McDonald's Goes Chicken Wings but Will Boneless Fly?

Stocks in this article: MCD BWLD

NEW YORK ( TheStreet) -- Chicken wing lovers across America are either rejoicing or snubbing McDonald's (MCD) new "Mighty Wings" offering this week whereby the fast-food giant will offer the meal at more than 14,000 nationwide locations. The roll out began this week and extending through the end of November.

Mighty Wings will be sold with so-called bone-in chicken wings either as a "drummette" or a "wingette." The wings are sold in three, five and 10 pieces starting at $2.99 and come with an assortment of nine sauces including Chipotle Barbeque Sauce, Creamy Ranch Sauce, Honey Mustard Sauce, among others, McDonald's says.

As wing-centric restaurants consider the chain's impact on their food costs -- especially if large bulk purchases by McDonald's limits overall supply thereby causing chicken wing prices to spike -- another scenario could emerge if the Oak Brook, Illinois-based company decides to continue the item for a longer period or even permanently: the mass adoption of the boneless wing.

McDonald's shares are up 9.9% this year, but underperforming the S&P 500, which has risen about 18% year-to-date.

Boneless chicken wings aren't actually wings, but more typically made from boneless meat of the chicken breast. Boneless wings have been riding a wave of popularity.

Also see: Wingstop Knows You Want More, More, More Wings

Chicken wing franchises are a relatively new concept that have only taken off as a viable business in recent years. While Buffalo Wild Wings (BWLD) (technically a sports bar and not a standalone wing concept) is the top selling establishment of chicken wings, according to Technomic, a host of smaller concepts are coming up with innovative wing-centric menus that have unique flavoring and options. The result is a big hit with consumers who appreciate being able to choose their own flavored wings at an affordable price.

The economics of wings is an interesting cycle. Prices tend to go up for the selected parts during football season, the strong selling season for wings (paired in many establishments with beer specials) topping out the week before the Super Bowl then declining during the off-season and summer seasons.

McDonald's seasonal promotion has already affected chicken wing prices. The company bought chicken wings for all their stores in bulk, so the price of wings jumped over the summer, even though prices have leveled off since then, says Dan Corrigan, marketing manager for Wing Zone, a chain with 70 U.S. locations and 10 international locations.

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